The IRS can levy the funds in your retirement accounts, including 401(K) plans, IRAs, profit sharing plans, SEP-IRAs, and Keogh plans. Many taxpayers may be unaware that the IRS has this authority because retirement plans are often protected from creditors. However, the IRS has powers that exceed those of most creditors, including levying the funds in your retirement account.
The IRS uses a three part analysis before levying a retirement account. There is a bit more caution used by the IRS in these cases when compared to bank account or wage levies. These accounts provide for a taxpayer’s future welfare, and the IRS will only levy these funds if certain requirements are met.
IRS Procedures for Levying a Retirement Account